Assume the following regression model: Lw = 10Yh + 15Yw 0.6Uh Where Lw is the labour force participation rate of women (measured in percentage, L w = 35), Yh and Yw is the average income of spouse and women (measured in thousand dollars, Y h = 10 and Y w = 6), and uh is the spouse unemployment rate, uh = 6.

Part (a): What is the expected effect of a decrease of $10000 in the income of the spouse on the participation rate of women? Part (b): What is the expected effect of an increase of $5000 in the income of women themselves on the participation rate of women?

Part (c): Break the latter down into its separate income and substitution effects

Part (d): Given the magnitude of the latter two effects, what would be the impact on female participation of an equal pay policy that increased the expected wages of females by $1000 while at the same time decreasing the expected earnings of their spouses by $1000?

Part (e): Calculate the pure income and the gross or uncompensated wage elasticities of participation, evaluated at the means. Part (f): Does this equation shed any light on why the labor force participation of married women has increased over time, even though their non-labor wage has also increased?